How many roles and responsibilities does a small Property Developer really have?
In the world of small property developers there are many roles to consider if your thinking this is a career option for you. When we started our property development company in 2016 i had some idea of what was involved having done 5 private renovations at this point. However i didn't really understand that rather than just going at my own pace with the sale and renovation of a property, time limits became key and managing it effectively was so much more important. On top of this keeping a record of everything was needed for the business and the accounts. Add all this together along with keeping up with the market ebbs and flows and nothing prepares you for the huge amount of work that this journey entails from buying the property and doing the legals, through to signing the rental agreement or sale agreement at the end of the project.
From my personal small property development experience here are a few of the many tasks that are involved.....
Buying a property for business.
buying a property for a business is very different to buying a property that you like in an area you prefer. This is something i found very hard to get my head around because i was constantly drawn to areas i liked and properties i liked and believe me i have made this mistake a few times. Its very hard to look at it from a different perspective and focus on numbers, stats and yields. Checking the comps, stats and current trends in the area is a very good idea. Targeting a market and researching that market around your chosen area is also necessary. If you want the site to be local i always found driving around the area and finding out what renovations were going on was really helpful. It will give you an idea of weather you can do what your setting out do to and if similar renovations are going on.
Weighing up weather you want to buy long term or short term will also have an influence and should be considered. You could buy in an under developed area that will eventually be up and coming and keep the property for some time but for short term this will give you little profit if any. The other end of the spectrum is potentially to not buy in an overdeveloped area where prices are at their maximum, however i've always looked impartially at this because it could be in high demand so may sell quickly for a quick turnaround. Another consideration is to avoid an area where there are very large developments going on because there will be too much competition although in today's world this is now practically impossible.
How to renovate the property for the target market.
Once you have chosen your target market and purchased your property, the layout needs consideration. Checking the current layout trends for that type of property and incorporating everything needed for your target market and what is expected from them is key. Look at layouts, make sure you include all the necessaries, for example a small family home will need a cloakroom toilet, possible utility if there is space, an open kitchen diner to follow current trends and bi folds for indoor our door living that is offered in most new houses and renovations. A good architect is key at this stage and a structural engineer. They will guide you according to your potential plans and give you the guidance you need on making the plans and layout happen and some of the pitfalls if there are supporting load bearing walls potentially being removed. At this stage interior design and layout is also a good idea. Where to place the kitchen, lounge area, TV area, bathroom layouts, kitchen layout, lighting layouts are all things that need to be done.
Building your Approved Plans and Layouts
Getting stuck in at this stage can save you money. From basic site duties to fully project managing, you can save money. Even if your not experienced, loading the skip, tidying up after the skilled labourers, keeping the site tidy and doing simple tasks can save money because the labourers are not having to hire someone to do it for them or they are not being taken off their job to do this stuff. Also if you can help with some of the phone calls, material ordering, basic site clearing, taking the deliveries, collecting orders, basic running around for trades and organising the quotes for the kitchen and bathroom fixtures and fittings you will save yourself money. If your thinking of Project managing i would highly recommend you do some type of project management course so you know what is involved. Many people think this is the easy side of the job. It isn't. It involves a vast amount of good communication, a good knowledge of sequencing, forming good relationships with your trades, being patient, understanding the trades and what is involved and the legal implications for running a site including insurances and health and safety.
A project management course will give you knowledge of sequencing of work and trades and what is expected of you as a site manager. Being hands on at this stage is Key and you will learn alot about the work place and how it runs in a typical day. Keeping the trades happy is also a very important job. Don't get under their feet, keep the kettle on, don't get too involved with their work and let them get on with it.
Interior Design and Finishing.
This is another key stage of the development. If the property doesn't look good its not going to attract anyone into buying it. Interior Design is not just about furnishings. It is a design process that should be considered at architect stage. Layouts are key in interior design and layouts are considered at architect stage. However Interior design can be a bit difficult to tap into without having to sign yourself up to a whole house contract which is why I created ByEmmaJaneInteriors an hourly tap into advice and service. At Architectural stage you could run your plans by an Interior Designer so they can consider how the kitchen layout will compliment where the dining area will be placed. Where the sofa can be placed in a room in relation to the TV position, socket positions, door, window and light source. For example you don't want to place the TV where the sun is shining on it all day. An interior designer will consider all the things that go into layouts that you may not necessarily consider. But if you choose to do it alone then these layouts are key to furniture placing and what styles you can have. Another example is you may not be able to have an L shaped sofa in the lounge depending on where the door, window and TV wall is but you may have in your mind at the beginning that is what your target market will want and if they cant have their wonderful l shaped lounge sofa it may possibly stop them buying the house.
Paint colours are also key. Timeless but on trend and also subtle and neutral. White can be a bit too harsh all over. Its best to choose a contrast on the walls so the skirting, doors and architraves look crisp, white and clean. But choosing something to contrasting is not a good idea as this becomes too personal and may limit your buyer if they don't like that particular tone.
Choosing the right floor finishes and colours is also key, depending on your target market and what is required you could use laminates that have a good 15+ year guarantee, engineered wood, or tiles on the ground floor. Carpet luxury depends on your target market also and whether your renting or selling. A nice luxurious carpet upstairs is great if your selling but something much more hard wearing is key if renting.
We part styled our latest renovation. This always softens an empty unfurnished house. If you don't have experience doing this you can use an Interior Designer like ByEmmaJaneInteriors by the hour. Give them a budget of how much you want to spend and get them to shop for the items for the styling, they will know exactly what interior finishes to buy. It doesn't cost much and is well worth it to add a few homely pieces into an empty space. For example our part styling in this blog cost approximately £200. Its made the house much more inviting.
keeping the books and Accounting
This wasn't totally new to me as i have my other business ByEmmaJaneInteriors and have been freelance beforehand, but what was an overwhelming experience was when the build was full on. Ordering, receipts and deliveries where daily and if you don't stay on top of the paperwork trail then your totally lost very quickly. Having a good accountant is key but you still have to submit all the listed daily activity and present that to them. People say its always best to keep this up to date daily and i totally agree. However in reality when your on site all day and doing your usual daily tasks this proves to be impossible. But its well worth trying to keep on top of it as much as you can. I had to force myself to do this once a week for a whole evening (4 hours a week) and im glad i did because it would have spiralled out of control very quickly or we would have faced a huge accountancy bill by handing it all over to the accountant to sort out. It really is good advice to stay on top of this. This also includes noting down mileage to wherever the site is from your registered office and mileage to go and pick up materials when using your own car.
So as you can see, there any many roles a small property developer has, buying and selling, legals, building, managing, labouring, interior design, styling and accounting to name but a few. It is an exciting career but you do have to be adaptable, hard working, open to anything, a multi tasker and determined!!